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Google Fiber Gets Time Warner Cable to Compete on Price
Amazing What Some Actual Competition Can Accomplish
by Karl Bode Thursday 31-Jan-2013 tags: competition · business · alternatives · bundles · Time Warner Cable
Initially, Time Warner Cable's attempt to fend of Google Fiber in Kansas City consisted of pooh pooh'ing the 1 Gbps, $70 service, trying to lock down local users into long-term contracts, and promising locals Twilight movie tickets not to switch. The company appears to have since changed tactics.

The company first started offering 100 Mbps service to locals despite not offering it anywhere else. Now Google Fiber appears to have accomplished the impossible -- they've gotten Time Warner Cable to actually compete on price. According to a user who writes in to the Consumerist, a user in the Kansas City region was given a price cut on his basic service tier, without having to even ask for it:

My latest cable bill was ~30% lower than the previous month. $29.99 vs. $44.94, for a savings — by their calculation — “of $23.96 this month.” My calculation is slightly different, I get a savings of $14.95, but lower is better. The line item has the note: “Enjoy your savings of $23.96 by subscribing to this package. (Offer expires 11/29/2014)” It doesn’t say anything about me having to do anything to get this rate, and the “package” they mention is the one I assumed I was using already. But the bill says $29.99, so that’s what I’m putting on the check.

It remains unclear if this price cut doesn't require a new contract, but at least Time Warner Cable is competing on price, something they very rarely have to do courtesy of limited competition. Throughout Google Fiber's short history Time Warner Cable has continued to insist that demand was not there for 1 Gbps service, and if it were -- the company would offer it. Granted the company previously said the same thing about 50 Mbps, and that's slowly becoming the industry standard.

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Van
Premium
join:2009-07-08
New Orleans, LA

No, we need to KEEP GOVERNMENT OUT

and allow Time Warner and others to enjoy the AWESOME CAPITALISM part of America where they write the rules, make billions, raise prices, and provide service that is average at best.

ArrayList
Premium
join:2005-03-19
Evanston, IL

Re: No, we need to KEEP GOVERNMENT OUT

amen brother

jmn1207
Premium
join:2000-07-19
Ashburn, VA
kudos:1
said by Van:

and allow Time Warner and others to enjoy the AWESOME CAPITALISM part of America where they write the rules, make billions, raise prices, and provide service that is average at best.

Sarcasm noted, however, government is involved to a degree, but it is conspiring with the conglomerates and not the people.
Androidian

join:2012-12-14
Purcellville, VA
Reviews:
·Comcast
I have to wonder what would happen in other areas of the country if community broadband service was created by local or county government to serve as competition for other providers. I'm not sure if I'd be 100% in support of developing an option like this everywhere, but I do have to think that providers like Cox, Time Warner, and Comcast might compete on price and service if they actually needed to do so.

skeechan
Ai Otsukaholic
Premium
join:2012-01-26
AA169|170
kudos:2

Re: No, we need to KEEP GOVERNMENT OUT

Many communities have tried, and incumbents sue to stop it. And if that fails they bribe the state legislature to outlaw muni broadband outright.
silbaco

join:2009-08-03
USA

Re: No, we need to KEEP GOVERNMENT OUT

So pool money together and start a cooperative.
ISurfTooMuch

join:2007-04-23
Tuscaloosa, AL

Re: No, we need to KEEP GOVERNMENT OUT

said by silbaco:

So pool money together and start a cooperative.

Building a network takes a lot more money than people are going to have on hand to throw into a pool.

However, starting a nonprofit organization that would seek loans to build it and then operate it on a nonprofit basis could work. They'd just need to charge enough to repay the loans, cover operating costs, and maintain a fund for needed repairs and upgrades. The only issue is that you can't start out too small, since you have to spread your costs over a large enough area to get enough subs so that you can charge them a competitive price.

I think the best place to try something like this would be in an area where you have lots of highly-paid tech-literate residents and crappy broadband service. Huntsville, Alabama comes to mind, although I don't know how good their broadband options are up there. For telco, they have AT&T, and, for cable, I believe they have Comcast and maybe some overbuild from Knology.
Skippy25

join:2000-09-13
Hazelwood, MO
Personally, I would like to see a nationwide rollout of 1 fiber network to every business and consumer that can be used by anyone to reach anyone. If I am in St. Louis and feel Comcast has the best offer and service, then I can use them over that. If I think AT&T is that company, I should be able to choose them.

How we accomplish this whether it be community based, state based or nationally based I dont care. I just believe that the people of the US should own it and not a corporation.

To begin that, I think all ISP's should be split to have an ISP side and a network side so they dont control both the network and the content.

tshirt
Premium,MVM
join:2004-07-11
Snohomish, WA
kudos:3
Reviews:
·Comcast

4 edits

Re: No, we need to KEEP GOVERNMENT OUT

How exactly are you going to pay for this nation wide fiber rollout?
How much will it cost each user?
suppose a home, business owner decides the cost is more than it is worth to them... can they opt out? suppose it's more than they CAN pay? would you seize their property?
How are you going to compensate existing providers for your anti-competitive destruction of their business by making their physical plants worthless/non-viable. (even existing fiber rollouts that don't meet your specs)
Suppose your take rate is not high enough due to cost, or gov't restrictions on usage (Gov't owned network COULD NOT be used for terrorism, criminal, or treaty violations such as IP theft, for example) Who would pay the full cost?

It obviously can't be built overnight, so who gets served first?
Suppose by the time it is built, a private provider comes up with a better, cheaper solution (wireless quantum sub-nanosecond bonding) which can be rapidly rolled out using entirely private funds at a lower price point, will your Gov't net block them to "protect" the unpaid taxpayer investment?
Cobra11M

join:2010-12-23

Re: No, we need to KEEP GOVERNMENT OUT

negative.., Government should use the FCC fund to do it.. lets face it the companies keep getting the money but not doing nothing to expand their networks.. their fault.. why should our tax money go to them?

that being said maybe a non profit that gets the money from the government same that their handing to the other companies... and build the network.. heck I wouldn't be surprised if google aint looking into trying to get that to subsidize their network build out

tshirt
Premium,MVM
join:2004-07-11
Snohomish, WA
kudos:3
Reviews:
·Comcast

Re: No, we need to KEEP GOVERNMENT OUT

The FCC (USF?) funds (or a like amount) HAVE been expanding the networks, the trouble being it's a drop in the bucket compared to the real cost.
Recognize that MOST of that was dedicated to providing copper PHONE lines, the idea of making a "greater than 14.4Kbps" requirement is very recent under FCC decree.
The phone company can't help that 'WE" have been paying them to provide out of date technology.
If you NOW want to require they scrap copper and replace it all with fiber, be prepared for a HUGE frontend bill even if (in theory) maintainace costs will drop (in theory, only because when a tornado or some redneck decides it's fun to pull out 50 miles of fiber, duct, and knock down some poles, it gonna be another big bill for the rush repair)

Xioden
Premium
join:2008-06-10
Monticello, NY
kudos:1
We could redirect $200B of the defense budget and still be about five times what any other country in the world spends, or still more than the next 7 countries combined spend. And then somewhere around 20-30% of that would actually come right back in the form of taxes over the few years the build out would take.

tshirt
Premium,MVM
join:2004-07-11
Snohomish, WA
kudos:3
Reviews:
·Comcast

Re: No, we need to KEEP GOVERNMENT OUT

We certainly could, but we haven't yet. and remember that defence money pays exist salaries for millions, and like much of the federal budget unlikely to be easily redirected/recommitted.
If you expect a 20-30% return on taxes, in only a few years, you are dreaming. even if you taxed at 100% it is unlikely faster internet alone would instantly generate $25+ billion in NEW annual revenue (NEW, being not just taken/displaced from other sectors)
This isn't a 3-5 year pay off sized project, and until proponents offer more realistic guesstimates and solutions to compensating existing providers(which may be an equal or larger amount) a publicly owned overbuild won't get much traction.
This is why USF like, 'slow and steady' trickle of funds has been the basis of federal efforts to gradually improve broadband.
Yes it is slow, inefficient, and like insufficient on it's own, it and an occasional "stimulus"-like (which actual was more effective that expected) bursts are all the federal funding you will see.
Consistent, long term (something we the people haven't been good at for awhile) tax benefits to make it in the incumbents best interest to do it themselves will make the product more expensive (any mandate with all the added requirements does this) but would be more likely to get it done quickly.

Xioden
Premium
join:2008-06-10
Monticello, NY
kudos:1

Re: No, we need to KEEP GOVERNMENT OUT

That $200 billion doesn't need to be taken out of one years defense budget. Over the course of a 5 year roll out $40 billion a year is a lot more manageable. And the fact of the matter is more than that is wasted on either redundant stuff that is already handled by other agencies or outright stupid shit.

The USF is a slush fund that is just one huge money sink.

Subsidies just wont cut it anymore, see pretty much every single small community build out in the past 5 years and all the opposition faced by them by the incumbents. You think subsidies are going to stop that?

Compared to all the bullshit this country spends money on, a national broadband build out should be a no-brainer. The sad fact is it is good for our infrastructure and good for the American People. Those two facts alone will guarantee corporations will never allow it to happen since it will hurt their shareholders bottom lines.

tshirt
Premium,MVM
join:2004-07-11
Snohomish, WA
kudos:3
Reviews:
·Comcast

Re: No, we need to KEEP GOVERNMENT OUT

said by Xioden:

...Compared to all the bullshit this country spends money on, a national broadband build out should be a no-brainer....

I very much agree.
Your problem is convincing the no brainers in Washington and all the people at home that, Right now, WE ALL need to commit to an extra $2000 in debt per household over the next 5 years and the THIS is the plan WITHOUT changes and modification and studies and committees and boards and commissions and addons and extras and earmarks and...

AND that this is actually enough to complete it and it will pay for itself in X-years and Uncle Bob who works at the cableco will still have a similar job. and that this isn't just so your kids can spend the rest of their lives in the basement playing games, downloading stolen IP, hacking sites, and whacking off.

jfleni

@bhn.net
"To begin that, I think all ISP's should be split to have an ISP side and a network side so they dont control both the network and the content".

Right On! Just like a trucking or moving company They don't own the roads, but make a business out of using them for services of various kinds. But the "free enterprise" dogma we hear from all the plutocrats is "We should own everything" ..Gimme!

jmn1207
Premium
join:2000-07-19
Ashburn, VA
kudos:1

Re: No, we need to KEEP GOVERNMENT OUT

Speaking of trucks and moving companies, there are similar issue with regards to beer makers becoming distributors. It makes it too easy to allow for anti-competitive behavior.

»articles.chicagotribune.com/2011···mmission


ragincajun

@cox.net
Lafayette, LA has its own cable network (LUS Fiber) that competes with COX.

Filbbetigibb

@lmco.com
Yeah, because no government was ever involved in giving sweetheart franchising deals to cable and phone companies.

Oh, wait, those were governments that did that? And then got the kickbacks to keep them in place?

Never mind...

abitbent

join:2004-04-23
Brantford, ON

Could be worse...

Be happy you don't live in Canada, where anything over 80GB of usage per month is considered excessive according to our cable provider.
alexintexas

join:2003-01-11
San Antonio, TX

real reason for LA and SATX rate hikes??

So if this is the real reason for the rate hike. LA and SATX are paying for the lost revenue and continue to lose, this would be utter BS! TWC still makes a profit even at those rates
ISurfTooMuch

join:2007-04-23
Tuscaloosa, AL

Re: real reason for LA and SATX rate hikes??

At least in LA, TWC just got rights to the Dodgers games. And, as you know, sports rights are expensive, so guess who gets to pay for that. Plus, they probably figure that people will pay a premium to see those games, which drives prices even higher.
alexintexas

join:2003-01-11
San Antonio, TX
Reviews:
·RoadRunner Cable
·Clearwire Wireless

Re: real reason for LA and SATX rate hikes??

Does not matter what it costs,,,,the ad revenue generated of this sole channel would pay for its content, and id go as far to say they would even get profits off the ad revenue..This is what "everyone" fails to understand that ad revenue pays for the content, and even profits,,,folks like us pay to pay to watch tv.

google is a PERFECT example of it and funny thing google does not pay for any content but it does profit on all its ad revenue

PaulHikeS2

join:2003-03-06
Manchester, NH

Re: real reason for LA and SATX rate hikes??

said by alexintexas:

google is a PERFECT example of it and funny thing google does not pay for any content but it does profit on all its ad revenue

Google profits on it's ad revenue because they do not pay for content. They catalog and search for it.

Other's pay for the content.
--
Jay: What the @#$% is the internet???
alexintexas

join:2003-01-11
San Antonio, TX

1 edit

Re: real reason for LA and SATX rate hikes??

i was speaking of "youtube" sorry for the confusion

which i might add is owned by google
xenophon

join:2007-09-17

TWC lowered my rate too

My fiberhood is not scheduled until Fall. TWC actually raised my rate a couple months ago. I called about it and before I could complain they knocked it down about $25/month and increased my bandwidth but only until end of Feb. SureWest also entered my hood so I'll be using them as leverage until Google deploys. Uverse is in my hood but not my building.

Sounds like TWC will raise rates for all and if only 20%-30% complain, they'll lower it unchallenged (and for just a period) while still net gaining from those who don't complain.

elios

join:2005-11-15
Springfield, MO

Re: TWC lowered my rate too

amazing what some real competition will do

swintec
Premium,VIP
join:2003-12-19
Alfred, ME
kudos:4
Reviews:
·RapidVPS
·Sprint Mobile Br..
·VoicePulse
·RoadRunner Cable

Re: TWC lowered my rate too

said by elios:

amazing what some real competition will do

Yea, for what TW is missing out on in that area, the costs are being passed on to other divisions and customers in the rest of the country.
--
Usenet Block Accounts | Unlimited Accounts

elios

join:2005-11-15
Springfield, MO

Re: TWC lowered my rate too

and if the had hte same competition in the rest of the country they couldnt pull that shit
they only do it because they can get away with it

like many of said dont like it switch...
OH RIGHT YOU HAVE NO ONE TO SWITCH TO
silbaco

join:2009-08-03
USA

Re: TWC lowered my rate too

They could. Because they would have to. The company would be unprofitable if the applied these rates across the country.
axus

join:2001-06-18
Washington, DC
If they were losing money in Kansas City, they'd be violating anti-trust laws doing that. It's exactly what Standard Oil did 100 years ago. I imagine they are not losing money, even at the discount.
silbaco

join:2009-08-03
USA

Re: TWC lowered my rate too

They no doubt are. It probably covers programming costs, but labor and other expenses probably push them over the edge.

Plenty of ISPs serve markets that are unprofitable either due to low uptake or being too small of a market. Anti-trust or not, they still do. The FCC is even trying to pay them to do so.

whiteshp

join:2002-03-05
Xenia, OH
As stated in quarterly earnings to stockholders TW's broadband service operates at 90%+ profit. They are not losing money. Their gravy train is still there just one boxcar shorter.
silbaco

join:2009-08-03
USA

Re: TWC lowered my rate too

They do not operate a 90%+ profit. In fact just released today their profits were much lower than expected and the stock price has taken a hit.

whiteshp

join:2002-03-05
Xenia, OH

Re: TWC lowered my rate too

On their internet not their TV service.
en103

join:2011-05-02
TWC lowered my rate by $50/month and doubled my bandwidth up/down.

I suspect that with the Dodgers deal, it'll end back where it was.
Best time to 'negotiate' rates - between Thanksgiving and Xmas.
They know the 'holiday' season.
silbaco

join:2009-08-03
USA

Sorry

Just because people are threatening to switch to Google Fiber doesn't mean there is demand for Gigabit internet. You still can't find a server that will let you download at even half that. People just want faster internet. The fact that it is Gigabit is just a bonus and good for marketing.

See 9 replies to this post

nycUSER

@rr.com

lowered rates today in nyc

time warner's hit in their earnings report also warranted price changes on their internet packages.

the 50mb ultimate plan dropped from 99 to 74.99

still a complete ripoff but amazing what competition does...
»www.timewarnercable.com/en/resid···ans.html

See 6 replies to this post
elray

join:2000-12-16
Santa Monica, CA

Not necessarily the result of Google

We've seen the same actions in California, for two years, where TWC would automatically re-promo/re-rate us (downward) without asking -what I would call "Most favored nation treatment".

No Google required, and their rates have always been half that of Fios or less, regardless of whether one can get fiber.

I wouldn't worry about the incumbents.

Question is, when will Google charge less than $125 for their TV service? Will they survive, will they stick around for the long haul without special treatment? Will they offer a more reasonable price point for broadband, like Surewest and Sonic? Will they actually learn to do customer service?

See 11 replies to this post
APG
Premium
join:2007-01-13

Wait

One random post to a sketchy website like Consumerist qualifies as "news"? There are no standards anymore, are there?
etaadmin

join:2002-01-17
Dallas, TX
kudos:1

Re: Wait

said by APG:

One random post to a sketchy website like Consumerist qualifies as "news"? There are no standards anymore, are there?

And the fact that the article fails to mention that at&t's uverse is also part of the 'competition' in that area. How is uverse doing in google-fab-fabulous-fiber land? Is uverse thriving with their superfast 18Mbps internet?

IM1811

join:2001-08-20
Haverstraw, NY
I don't know about Consumerist being 'sketchy'. They are owned by Consumer Reports, who have a subscription base of over 7 million readers, and have been in business since 1936.
--
»www.bartgordon.net
APG
Premium
join:2007-01-13

Re: Wait

said by IM1811:

I don't know about Consumerist being 'sketchy'. They are owned by Consumer Reports, who have a subscription base of over 7 million readers, and have been in business since 1936.

I agree that Consumer Reports is not sketchy. However, I think it's unfortunate that CR chose to sully its well-deserved good reputation by taking over consumerist.com from Gawker Media.

It's a lousy website and its editors are extremely self-righteous and arrogant. Even minor, probably accidental, infractions are turned into breathless scandals. I bet I could report that I was overcharged two cents by, say, Best Buy, and consumerist would turn it into "Den of Thieves!"

Bah.
tmc8080

join:2004-04-24
Brooklyn, NY
Reviews:
·ooma
·Optimum Online
·Verizon FiOS

kickbacks

Time Warner has a new commercial out with a money back guarantee and $200 rebate card with 2 year agreement. Wow, that sounds interestingly familiar, except with Verizon Fios it's $300. Not really competition, but very comical indeed...

Still waiting for cheaper broadband prices and speed increases to be somewhat realistic in competing with 300 megabits let alone 1 gigabit symmetric.

milnoc

join:2001-03-05
H3B
kudos:1

Consequences of increased competition...

...increased access to Internet porn.

»www.youtube.com/watch?v=sdE0bm0TMkI
Cobra11M

join:2010-12-23

Re: Consequences of increased competition...

don't give me that crap..., Increased speed is needed weather or not people on here agree.. why would AT&T and Verizon tout LTE (70mbps or a little less).. heck half of the usa doesn't even have a choice of over 10.. much less even that.. 100mbps should be standard for everyone.. 1gbps is a little to much but would be helpful

LightS
Premium
join:2005-12-17
Greenville, TX

Re: Consequences of increased competition...

wat

camaro92
Question everything
Premium
join:2008-04-05
Westfield, MA

Finally

A big company steps on another company's toes and we for once don't get the shaft. Yaa for competition.
prairiesky

join:2008-12-08
canada
kudos:2

Re: Finally

said by camaro92:

A big company steps on another company's toes and we for once don't get the shaft. Yaa for competition.

depends what you mean by "we".... wait until you see the anouncements that TWC starts cutting jobs. Then think that someone just got fired and can't feed their family because you wanted to pay $5 less on your bill.... The greed consumer has been putting lively hoods on the line for a long time due to their demands. The ramifications their price cuts may not be seen instantaneously, but there will be ramifications.

mob
On the next level..
Premium
join:2000-10-07
Reviews:
·SureWest Internet

Google Fiber has

Google Fiber has lowered prices all over the area. I live in Johnson County, we are probably never going to get Google Fiber. But we have managed to get in on the deals that companies are offering to people in KCK and KCMO.

My 50/50 fiber connection is $60 a month...Not a gig each way, but considering the fact I was paying $60 a month for 25/25 a year ago, I would say I am pleased with the development.
--
Ich habe kein Mitleid - Me
You're a daisy if you do. - Doc Holliday
And as always, have nice day.

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